October 5 – Soybeans Jump as Rains Hit Harvest Season

Grain markets were mixed Thursday as export data and weather forecasts dominated the chatter on the floor of the Chicago Board of Trade. Corn prices were higher after a big uptick in weekly sales, while wheat prices were all over the map.

Here’s our daily recap of grain prices from Chicago.

Corn Prices Tick Higher

Corn prices ticked higher, while cash prices slipped after a round of another day of key economic data. The USDA reported an unexpected uptick in weekly export sales for the calendar year. The agency reported exports of a little more than 814,000 metric tonnes last week. That was a 150% jump from the previous week.

The agency also reported that Mexico was the largest purchaser of U.S. corn. The agency reported that Mexico purchased about 190,600 metric tonnes last week.

The corn markets are somewhat in limbo as they wait for next week’s WASDE report. Yesterday, we saw INTL FCStone hike their expectations for both corn and soybean yields.

Today, it was Informa that increased its yield expectations. Informa analysts project that the USDA will hike its corn yield figure to 170.5 bushels per acre for the 2017 year. That figure is an eight-tenths of a bushel increase from their previous forecast.

The massive corn glut around the globe is expected to affect planting in the weeks ahead.

Soybeans Rally on Weather Data

Soybean prices received a nice bump Thursday despite the USDA releasing bearish export data. Rains across the Midwest are expected to slow down the harvest blitz that we’ve seen over the last two weeks. Farmers have been cutting soybeans at the expense of corn.

The November soybean contracts added 8.75 cents to close the day at $9.6675. The January contract added 8.5 cents to finish at $9.77.

USDA export data came in lower than analysts had expected. The agency reported exports of 1.016 million metric tonnes for the week ending September 28. That figure was a stunning drop – almost 66% — from the previous week’s export figure. It was also a 40% decline from the same period in 2016.

But there is hope. Daniele Siqueiria at AgRural Commodities in Brazil predicts that China is on the verge of boosting its purchases from the United States very soon. The reason: Brazil is running out of exportable soybeans despite its record for monthly exports last month. [1]

Chinese buying would be welcomed after a slowdown in big purchases in recent weeks. The marketing calendar kicked off with a swarm of big orders above 100,000 metric tonnes. But those large deals have disappeared from daily reporting systems.

The prediction is that low corn prices will spur an uptick in soybean acreage in the year ahead. Even though a new Mato Grosso ethanol facility will aim to consume the glut in the region, the increase in production is a source of debate.

This morning, Brennan highlighted that Monsanto had entered the conversation on Brazilian production.

Monsanto’s COO Brett Begemann predicted that the corn seed market would be “a lot smaller” in Brazil in the year ahead. Begemann cited reports that corn acres would fall by 20% to 30%. [2]

Overall, Brazil is expected to export 65 million tonnes of soybeans in the year ahead. That’s a staggering figure and is going to comprise at least 60% of their total output.

That said, Abiove predicts that total output is expected to fall. In the wake of weather delays across certain regions, the analysts slashed their output expectations from 113.5 million metric tonnes to 108.5 million metric tonnes.

Wheat Prices Mixed Across U.S.

In Chicago, SRW contracts shed 1.25 cents to close the day at $4.4075. The March contract dipped 1 cent to close the day at $4.595.

In Kansas City, the HRW contract fell 1.75 cents to close the day at $4.3425. The March contract dropped another 1.75 cents to close the day at $4.52.

Finally, spring wheat was the lone winner in the wheat complex. Prices in Minneapolis jumped more than 5.5 cents for the December contract. The March contact added 5.5 cents to finish at $6.29.

Wheat prices reacted negatively to news that Russia’s Ag Ministry has set its new year wheat production forecast at 81.4 million metric tonnes.

The USDA released its weekly export number, which topped many expectations. For the week ending September 28, the U.S. exported 492,265 metric tonnes. That was a 13% jump from the previous week.

This morning, Brennan highlighted that protein quality is higher while falling number for wheat have been on the decline (with the exception of soft white spring wheat.)

Be sure to take a peak at his analysis of U.S. Wheat Associates’ latest wheat quality report, right here.

All Eyes on the Labor Department

On Friday, the U.S. Labor Department will release its official employment report for the month of September. Economists largely anticipate that the agency will say that the unemployment rate will remain unchanged at 4.4%. Consensus expectations also anticipate that the economy added just 100,000 new jobs for the month.

While that figure seems low, the U.S. economy has seen increased tightness in the labor market with the official figure much lower.

About the Author
Garrett Baldwin

Garrett Baldwin is a content strategist and editor at FarmLead. He covers the global grain markets and public policy issues related to the agricultural industry. He is a graduate of the Medill School of Journalism at Northwestern University. He also holds a Master’s Degree in Economic Policy from The Johns Hopkins University, an MS in Agricultural Economics from Purdue University, and an MBA in Finance from Indiana University.

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